The process of transforming otherwise illiquid financial assets into marketable capital market instruments is know as
A)securitization.
B)internationalization.
C)arbitrage.
D)program trading.

Question

Quizplus · Accepted Answer

Securitization is the process of taking an illiquid financial asset or a group of assets and transforming them into marketable securities. These securities can then be bought and sold in the capital markets. The securities created through securitization are known as asset-backed securities (ABS) or collateralized debt obligations (CDOs). Securitization enables investors to invest in a diverse range of assets and also helps banks and other financial institutions to manage their risk and liquidity more efficiently. Therefore, securitization is the correct choice for this question.

The Process of Transforming Otherwise Illiquid Financial Assets into Marketable